STR Arbitrage stings landlord with a $180,000 fine

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STR Arbitrage stings landlord with a $180,000 fine

Richard Elvin
Investor · Cleveland, TN · Member since 2016 · 279 posts · 187 votes

This is one of the reasons I would be very hesitant to allow an arbitrager access to my property. The home owner, not that arbitrager, is stuck with the fine. Even if the home owner wins a judgment against the arbitrager, it will be hard to recoup $180,000.

"The city arrived at the $180,000 fine based on a $500-a-night penalty for each of hundreds of nights it tracked as booked at Tao's property, according to documents submitted to the City Council."

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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
2y

This was because it was illegal to do so in the first place and the homeowner should have known this.

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  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    2y

    This was because it was illegal to do so in the first place and the homeowner should have known this.

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  • Mya Toohey
    Real Estate Agent · Tampa Florida · Member since 2013 · 630 posts · 303 votes
    2y

    Yes, especially here in the Clearwater and Tampa Area of Florida.  The rules are very strict.  You have to know if your property is allowable or not.  It's crazy that the arbitrager probably knew that the homeowner was responsible and still did it. 

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  • Andrew SteffensBusiness Member
    Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
    2y

    Not sure how Las Vegas operates but when I get a code violation of any sort I get certified mail delivered to my personal house and multiple other regular mail attempts.  I find it hard to believe they did not contact the owner and he had no idea.  I would be curious to see how this plays out in the end.

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  • KiKi ChaseBusiness Member
    Real Estate Agent · Indianapolis, IN · Member since 2022 · 184 posts · 75 votes
    2y

    If they knew what the tenant was doing, then it is a shared blame. It is unfortunate, though. When we look for arbitrage units for our clients to sublease, we are upfront and honest, as well as explain the risks to both parties of this model. 

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  • Sarah KensingerPro Member
    Real Estate Consultant · OH · Member since 2023 · 2k+ posts · 1k+ votes
    2y
    Quote from @Andrew Steffens:

    Not sure how Las Vegas operates but when I get a code violation of any sort I get certified mail delivered to my personal house and multiple other regular mail attempts.  I find it hard to believe they did not contact the owner and he had no idea.  I would be curious to see how this plays out in the end.

    Exactly, more than likely both are at fault by not paying attention or caring. Or the landlord had jacked the rent up since it was an arbitrager and didn't want to lose that extra LTR income. 
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  • Stephen DeThample
    Real Estate Agent · Las Vegas, NV · Member since 2020 · 459 posts · 305 votes
    2y

    There are a lot of owners who are playing the illegal Airbnb game.  The people from the city will make a reservation on Airbnb to catch you and find you $1000 per day based on the amount of time it’s been on Airbnb. 

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  • Chai Xiong
    Investor · Orlando, FL · Member since 2012 · 312 posts · 165 votes
    2y

    Yikes game over

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